pobierz - Wydział Nauk Ekonomicznych SGGW w Warszawie

- Means to finance the start of companies operations, its development or expansion,when venture capital investor enters into an agreed share of the own capital ofa company for its provide a certain amount of financial capital,- The newly emerging companies - setting up a joined company with a cash contributionto basic capital of the venture capital company 1 .The venture capital is a type of private equity finance involving investments in unquotedcompanies with growth potential. It is generally medium to long term in nature made inexchange for a stake in a company. The term a venture capital is likely to be accepted asthe generic term for business angels, mezzanine equity, institutional or any similarinvestments in early stages of business 2 .Primary investors of the venture capital are following:Business angels,Dependent, semidependent and independent investors,Government supported organizations.Possibilities of the venture capital financing:1. Seed capital - the completion of a research, development and verification of initialconcept and business plan before start-up position is achieved by enterprise,2. Start-up capital - financing provided companies to develop and finalize production ofa product or service and initial marketing. Enterprises may be in the establishment phase(this is a new business) or enterprises that have already been established, but do not selltheir products or do not provide their services regularly on a commercial basis,3. Other early stage – enterprise has completed a development phase of the product orservice and requires further financing to start commercial production for the purposes toachieve early sales, a company has not had to make a profit yet,4. Development, expansion - financing provided for the purpose of growth anddevelopment already production enterprise, irrespective of whether they have reachedthe breaking point or not, the investment goes to the expansion of production,development of market potential, further development of a product or service, possiblyin extending working capital 1 .Using of the venture capital as an innovative finance instrument has some advantagesand disadvantages.Advantages of the venture capital:One of the possibility strengthening of capital which is owned by an enterprise,Means of ensuring growth of an enterprise,1 THE NATIONAL AGENCY FOR THE DEVELOPMENT OF SMALL AND MEDIUMENTERPRISES: http://www.nadsme.sk/content/rizikovy-kapital [cited 2011-02-16]2 DAGOGO. D. W., OLLOR. W. G. The effect of venture capital financing on theeconomic value added profile of Nigerian SMEs. African Journal of Accounting,Economics, Finance and Banking Research Vol. 5. No. 5. 2009. p. 41. Available online< http://www.globip.com/pdf_pages/african-vol5-article2.pdf>198